Groundbreaking "Loss of Use" Decision
In J&D Towing LLC v. American Alternative Insurance Company, the Texas Supreme Court reversed long-standing law in Texas that a party could not recover “loss of use” damages for property that has been totally destroyed. Prior to this recent decision, a party could only recover the “fair market value” of property which was totally destroyed and could not recover damages for “loss of use”. In J&D Towing, the company’s only tow truck was destroyed due to an automobile accident and it was a total loss. The company settled with the tortfeasor’s insurance company and then made a claim under its underinsured motorist policy for “loss of use” of the vehicle. Citing the trend in other jurisdictions, the Texas Supreme Court held that it doesn’t make sense to allow recovery for “loss of use” damages when property is only partially destroyed versus property being totally destroyed. Therefore the Texas Supreme Court stated that J&D Towing could recover their damages for “loss of use” in addition to the fair market value of the tow truck.